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Luke Kawa

AMD posts top- and bottom-line beat in Q3 with Q4 sales guidance ahead of estimates

Advanced Micro Devices reported third-quarter results after the close on Tuesday that exceeded analysts’ expectations on the top and bottom lines, with guidance to match.

  • Adjusted diluted earnings per share: $1.20 (compared to an analyst consensus estimate of $1.17)

  • Revenue: $9.25 billion (estimate: $8.74 billion, guidance: $8.4 billion to $9 billion)

  • Data center revenue: $4.34 billion (estimate: $4.14 billion)

  • Adjusted gross margin: 54% (estimate: 54%, guidance: 54%)

Its Q4 guidance for sales of $9.3 billion to $9.9 billion was strong relative to the anticipated $9.2 billion, while its adjusted gross margin outlook of 54.5% is bang in line with estimates.

Shares were as much as 6% lower following these results, but have since recovered and are in positive territory.

“AMD’s strong 3Q sales beat and 4Q outlook were likely driven by stronger PC and server CPU demand — similar to Intel’s results — along with continued share gains,” Bloomberg Intelligence analysts Kunjan Sobhani and Oscar Hernandez Tejada wrote. “The GPU ramp-up remains ahead of expectations, aided by a gaming rebound.”

AMD has had a high-profile Q4 so far, striking a megadeal with OpenAI that its CFO said “is expected to deliver tens of billions of dollars in revenue.” That announcement prompted more than 20 price target hikes from Wall Street analysts in a 24-hour span.

The company followed that up with a pact with Oracle, which said it would deploy 50,000 of AMD’s new flagship chips in data centers starting in the second half of next year. On the upcoming conference call, the Street will be looking for as much color as possible on the sales outlook for those MI450 chips.

Ahead of this release, Morgan Stanley analyst Joseph Moore wrote:

“The focus should remain on MI450. AMD’s rack scale solution shipping next year is the key, and we are excited to see what the company can do. It’s still early to make market share assessments, and while the Open AI agreement is clearly an accelerant, the reliance on cloud providers to ramp those 6 gigawatts still creates some uncertainty. Ultimately, to drive share gains, the company will need to provide better ROI than NVIDIA can offer, and customers still raise questions about that given lower rack density and the need to resolve ecosystem issues.”

The chip designer was the third-best-performing member of the VanEck Semiconductor ETF in 2025 heading into this report, with shares having more than doubled year to date.

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Max Knoblauch

US airlines climb as oil plunges following Trump’s softer position on Iran intervention

West Texas Intermediate crude futures were down around 4.7% Thursday afternoon as President Trump appeared to soften his stance on further US strikes against Iran.

That sent US airline stocks climbing, as investors priced in lower fuel costs. Shares of United Airlines, Delta Air Lines, and American Airlines all rose about 3% on Thursday. Earlier this month, airline stocks were boosted when investors appeared to price in some medium-term relief on the possibility of Venezuela’s reserves becoming more developed.

markets
Luke Kawa

TSMC’s blowout quarter, guidance, and capex plans send AI to the sky

TSMC’s stellar Q4 results, bright Q1 guidance, and willingness to spend way more on capital expenditure than analysts had anticipated this year are giving a big jolt to the AI trade.

“We believe the strong 1Q26 guidance has likely surprised many investors to the upside,” wrote Needham analyst Charles Shi, who boosted his price target on the stock to $410 from $360 in the wake of these results. “Solid CapEx guidance should also lead to even stronger wafer fab equipment (WFE) outlook for 2026 and beyond.”

Beyond TSMC, the results are boosting other stocks tied to AI:

No single quarter of corporate earnings or guidance is sufficient proof against (or in favor of!) any kind of AI bubble, particularly when the biggest drivers of capex have consistently said the risk is spending too little rather than too much.

But TSMC is keenly aware of the potential downside of overextending itself into a future air pocket in demand, and has engaged in long-term planning and channel checks downstream to better understand the market for its products.

If TSMC’s capex plans aren’t executed well, it would be a “big disaster” for the company, CEO CC Wei said on the conference call.

But engaging with customers over their production needs for new wafers is being done “at least two to three years in advance,” he added.

“I spent a lot of time in the last three, four months talking to my customers and then my customers’ customers” to make sure that demand is real, said Wei, who came away “quite satisfied with the answer” and was shown “the evidence that the AI really helped their businesses.”

markets
Matt Phillips

Talen soars on new power plant purchases in giant grid feeding Data Center Alley

Talen Energy soared early Thursday after the Houston-based utility said it had bought power plants in the massive PJM exchange, which has seen rising consumer prices linked to AI infrastructure.

The Wall Street Journal reported Monday on how the run-up in prices has been a growing political headache for data center developers.

Yesterday, PJM cut its forecast for peak summer of 2027 demand, suggesting that data center electricity demand going forward may have been overstated.

But Talen’s purchase of natural gas-fueled plants — one in Indiana and two in Ohio — for $3.45 billion in cash and stock suggests the company remains bullish on the AI build-out, especially within the 13-state PJM grid. The nonprofit power grid serves 67 million people from New Jersey to Kentucky, and includes key areas of relatively high data center density such as Ohio and Virginia.

Early Thursday, Talen shares were up by the most since last July. This reaction to the latest in a string of acquisitions suggests Talen executives have an incentive to stay on offense.

Talen Energy Continues Portfolio Expansion with Acquisition of Additional High-Quality PJM Natural Gas Assets from Energy Capital Partners

The Wall Street Journal reported Monday on how the run-up in prices has been a growing political headache for data center developers.

Yesterday, PJM cut its forecast for peak summer of 2027 demand, suggesting that data center electricity demand going forward may have been overstated.

But Talen’s purchase of natural gas-fueled plants — one in Indiana and two in Ohio — for $3.45 billion in cash and stock suggests the company remains bullish on the AI build-out, especially within the 13-state PJM grid. The nonprofit power grid serves 67 million people from New Jersey to Kentucky, and includes key areas of relatively high data center density such as Ohio and Virginia.

Early Thursday, Talen shares were up by the most since last July. This reaction to the latest in a string of acquisitions suggests Talen executives have an incentive to stay on offense.

markets
Max Knoblauch

Spotify increases its US subscription prices for the third time in 3 years

The cost to stream music and podcasts ad-free on Spotify is going up again in the US next month, marking the third price hike by the company since 2023.

The monthly cost of individual premium plans will increase from $12 to $13, while family plans will jump from $20 to $22. Spotify last raised US prices in July 2024 (and 2023 before that). This is the first price hike under the tenure of new co-CEOs Gustav Söderström and Alex Norström, who together replaced Daniel Ek earlier this month.

Spotify shares climbed about 3% after the market opened on Thursday, but has since fallen in early trading.

When it reported third-quarter earnings in November, the streamer said its global paid subscriber count had climbed to 281 million — 12% year-over-year growth. At the same time, ad-supported revenue fell 5.5% despite an 11% jump in monthly active users.

markets
J. Edward Moreno

ACA enrollment deadline arrives with Congress still at an impasse over subsidies

The deadline to enroll in Affordable Care Act coverage has arrived with lawmakers yet to reach a deal to help keep millions of their constituents on their healthcare plans.

The Biden-era enhanced subsidies have now expired and lawmakers have yet to agree on what, if any, assistance could be provided going forward, with premiums expected to skyrocket. Americans have until Thursday to enroll in coverage for 2026.

The biggest providers of ACA Marketplace plans, like Oscar Health, Molina Healthcare, Centene, and UnitedHealth dipped as the enrollment deadline passed.

A solution reached after Thursday may be harder to implement considering many people have already forgone coverage. About 22.8 million people enrolled in ACA plans as of January 3, according to data released on Monday by the Centers for Medicare & Medicaid Services, down from 24.3 million in 2025.

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